839 former Qimonda workers to receive €2.4 million in EU funding for job search

The European Commission today approved an application from Portugal for assistance from the EU Globalisation Adjustment Fund (EGF). The Commission will now make a proposal to the European Parliament and the Council to mobilise the budgetary resources. The grant of €2,405,671 will help 839 redundant workers in the semiconductor industry to find new jobs.

"Today's decision will help the former Qimonda workers on the road to a new job through training and support to give them new skills", said László Andor, EU Commissioner for Employment, Social Affairs and Inclusion. He added: "I am confident that the planned measures will make the transition to a new job easier".

The Portuguese application relates to 839 redundancies in Qimonda Portugal S.A., an enterprise in the semiconductors sector. Qimonda Portugal applied for a state of insolvency as a result of the total stoppage of production at the German Qimonda factory, which was the supplier of raw materials to Portuguese unit, and after the failure to find an agreement with potential investors who could have continued production in Portugal. The insolvency of the German multinational Qimonda AG was due to the financial crisis, causing a contraction of the global economy and, in the case of Qimonda, the additional effect of reducing its capacity to invest in innovation and production equipment and the excess capacity in the Dynamic Random Access Memory (DRAM) market, which created enormous pressure on prices, forcing various companies to reduce production.

The loss of Qimonda adds close to 1,000 workers to the job-seekers in the Norte region, which is suffering higher rates of unemployment than the country as a whole. The Norte region was already accepted for EGF support in June 2009 (see IP/09/998).

The package of EGF assistance for the ex-workers of Qimonda Portugal S.A. will include skills recognition, vocational training, entrepreneurship training and support to business creation, support to self-placement and hiring incentives, and practice in the workplace. The total estimated cost of this package is €3.7 million, of which the European Globalisation adjustment Fund has been asked to fund €2.4 million. 839 of the 914 workers made redundant will benefit from the EGF assistance.

Background

There have been 66 applications to the EGF since the start of its operations in January 2007, for a total amount of about €373.6 million, helping more than 70,000 workers. EGF applications relate to the following sectors: automotive (France, Spain, Portugal, Austria, Germany, Sweden); textiles (Italy, Malta, Lithuania, Portugal, Spain and Belgium); mobile phones (Finland and Germany); domestic appliances (Italy); computers and electronic products (Ireland, Portugal and the Netherlands); mechanical/electronic (Denmark); repair and maintenance of aircraft and spacecraft (Ireland); crystal glass (Ireland); ceramics and natural stone (Spain); construction (Netherlands, Ireland and Lithuania); carpentry and joinery (Spain); electrical equipment (Lithuania) publishing and printing industry (Netherlands and Germany), furniture (Lithuania), retail trade (Czech Republic and Spain) and wholesale trade (Netherlands). Final reports from the earlier cases supported by the EGF show strong results in helping workers stay in the labour market and find new jobs..

The EGF, an initiative first proposed by President Barroso to provide help for people who lose their jobs due to the impact of globalisation, was established by the European Parliament and the Council at the end of 2006. In June 2009, the EGF rules were revised to strengthen the role of the EGF as an early intervention instrument. It forms part of Europe's response to the financial and economic crisis. The revised EGF Regulation entered into force on 2 July 2009 and applies to all applications received from 1 May 2009 onwards.